- Planet Antares Scam

DISCLOSURE REQUIRED BY
CALIFORNIA LAW
The State of California has not reviewed and does not approve,
recommend, endorse, or sponsor any seller-assisted marketing
plan. The information contained in this disclosure has not been
verified by the state. If you have any questions about this
purchase, see an attorney or other financial advisor before you
sign a contract or agreement.
B-501
WA REG. NO. 70009029
SC S.S. REG. NO. 504
FL AIN BO 1995067
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California Disclosure RD 2/16/10, PD 3/10
SELLER-ASSISTED MARKETING PLAN
DISCLOSURE STATEMENT AND INFORMATION SHEET
1. IDENTIFYING INFORMATION AS TO SELLER. The name of the seller of
this seller-assisted marketing plan is Planet Antares, Inc. ("Seller"), whose principal business
address is 5700 Buckingham Parkway, Suite 200, Culver City, California 90230. Seller was
formerly known as Antares Corporation. Purco Corporation, an affiliate of Seller, will act as
Seller's purchasing agent for the placement of the purchase order for vending machines on
behalf of the purchaser under this plan ("Purchaser").
2.
BUSINESS EXPERIENCE OF SELLER'S SOLE DIRECTOR AND
EXECUTIVE OFFICERS. The sole Director and executive officers who have responsibility
for the Seller's business activities are:
Dana Bashor
Director, President, Chief Executive Officer,
Chief Financial Officer and Secretary
Since its formation on April 3,1987, Mr. Bashor has been the President and Chief Executive
Officer of Seller. From August, 1986 to December, 2004, Mr. Bashor was the President and
Chief Executive Officer of Orion Products Corp. He is the sole shareholder of Seller.
3.
BUSINESS EXPERIENCE OF SELLER Seller is a California Corporation,
incorporated on April 3, 1987. Seller began marketing seller-assisted marketing plans on
April 3,1995. Seller began marketing the seller-assisted marketing plan offered herein on
April 3, 1995 and has not offered any other seller-assisted marketing plan. Seller also
conducts business under the name "Wealth Builders."
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California Disclosure RD 2/16/10, PD 3/10
4.
LITIGATION HISTORY. Neither the Seller, any of the persons listed in
paragraphs 1 or 2 above, nor any other company managed by a person listed in paragraphs 1
or 2 above:
A) Has at any time ever been convicted of a felony or misdemeanor or
pleaded nolo contendere to a felony or misdemeanor charge involving an alleged violation of
Title 2.7 of the California Civil Code, fraud, embezzlement, fraudulent conversion,
misappropriation of property or restraint of trade or (B) has at any time ever been held liable
in a civil action resulting in a final judgment or consented to the entry of a stipulated
judgment in a civil action, alleging a violation of Title 2.7 of the California Civil Code, fraud,
embezzlement, fraudulent conversion or misappropriation of property or the use of untrue or
misleading representations in an attempt to sell or dispose of real or personal property or the
use of unfair, unlawful or deceptive business practices, or is subject to any currently effective
injunction or restrictive order, including, but not limited to, a "cease and desist" order, an
"assurance of discontinuance", or other comparable agreement or order, relating to business
activity as the result of an action brought by a public agency or department, including but not
limited to an action affecting any vocational license except for: (i) A Consent Judgment and
Order, without any court findings of wrongdoing or admission of wrongdoing, entered into
for settlement purposes between the Federal Trade Commission, Orion Products Corp., Mr.
Bashor and Seller on July 19, 1996 in the United States District Court for the Northern
District of California (Case No. C-96-2586); (ii) A Consent Order, without any findings of
wrongdoing or admission of wrongdoing entered into for settlement purposes between the
Maryland Securities Commissioner and Seller on July 15, 2002 (Case No. 2002-0340); and
(iii) A Consent Order, without any findings of wrongdoing or admission of wrongdoing,
entered into for settlement purposes between the Maryland Securities Commissioner and
Seller on December 5,2003 (Case No. 2002-0761). Furthermore, none of the persons listed
in paragraphs 1 or 2 above has, at any time during the previous seven fiscal years, been the
subject of an order for relief in bankruptcy, been reorganized due to insolvency, or been a
principal, director, officer, trustee or partner of any other person that has so filed or was so
reorganized, during or within one year after the period that such person held such position
with such other person.
5.
DESCRIPTION OF SELLER-ASSISTED MARKETING PLAN. Purchaser
will purchase machines through an order placed by Seller with Purco Corporation, a company
under common ownership and management with Seller. Purco Corporation will then place a
purchase order for the machines with an unaffiliated manufacturing company. Purchaser will
have no obligation to make any payments to Purco Corporation or the unaffiliated
manufacturing company.
Seller also will provide the following services for a Purchaser of a seller-assisted marketing
plan:
A) Provide to Purchaser a start-up kit, which contains service records,
operating procedures manual and other data;
B) Provide to Purchaser full color presentation brochures, promotional
pictures and business mail pamphlets and corresponding materials;
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California Disclosure RD 2/16/10, PD 3/10
refreshments.
C)
Provide to Purchaser a selection of suppliers of wholesale
refreshments; and
D)
If requested, provide Purchaser market and promotional information on
6.
INITIAL FUNDS REQUIRED TO BE PAID BY A PURCHASER. Attached
hereto is a price list which describes the various plans available to the Purchaser. For limited
periods of time, Seller may offer the plans at a reduced price. The purchase of any plan will
require a fee not to exceed twenty percent (20%) of the purchase price (e.g., not to exceed
$4,000 on a $20,000 purchase) to be paid upon signing the Purchase Contract. The balance
(e.g. balance of 80% of the purchase price if the fee is 20% of the purchase price) of the
purchase price is to be forwarded by wire or cashier's check to the custody account, such
funds to be released only after evidence of receipt of equipment. Of the total payment, the
amount to be paid to the representative who induces the sale of this plan averages seven
percent (7%). Seller also may compensate individuals acting as references because of the
time and inconvenience involved in taking calls from prospective purchasers. Specific
purchase prices are set forth in the price list attached hereto. The down payment is refundable
only if Purchaser complies with the cancellation procedures described in the attached
Purchase Contract. Depending upon local law, a Purchaser may be required to pay a sales or
use tax with respect to the purchase of a plan.
7.
RECURRING FUNDS REQUIRED TO BE PAID BY A PURCHASER.
There are no royalties, commissions, advertising fees or other continuing expenses to be paid
by Purchaser to Seller.
8.
AFFILIATED PERSONS THE PURCHASER IS REQUIRED OR ADVISED
TO DO BUSINESS WITH BY THE SELLER. Seller does not directly or indirectly require
or advise the Purchaser to do business with any person. A Purchaser is free to purchase from
any source the products to be vended in his/her machines or any services related thereto.
Seller has no arrangements with any supplier and does not require Purchaser to do business
with anyone other than as stated above.
9.
OBLIGATIONS TO PURCHASE. Except for the equipment to be purchased
from Seller and the services to be provided by Seller, Seller does not require Purchaser to
purchase, lease or rent any real estate, services, supplies, products, inventories, signs, fixtures
or equipment relating to the establishment or operation of the seller-assisted marketing plan
business.
10. REVENUES RECEIVED BY THE SELLER IN CONSIDERATION OF
PURCHASE BY A PURCHASER. Seller does not require Purchaser to purchase any goods
or services (other than the equipment described in the Purchase Contract) from any supplier.
Seller does not receive any revenue or other consideration from such suppliers.
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California Disclosure RD 2/16/10, PD 3/10
11. FINANCING ARRANGEMENTS. Seller does not offer financing for the first
purchase of equipment. If a Purchaser has timely made all prior payments and a purchaser's
credit is approved by Seller, Seller will offer a Purchaser the right to purchase additional
machines after the placement of the Purchaser's initial order at the same purchase price
provided for in the Purchase Contract, with a fifty percent (50%) down payment and the
balance to be paid in twenty-four monthly installments without interest.
If a Purchaser elects to place additional equipment orders under the financing program
described above, the Purchaser must sign a promissory note for the balance and a security
agreement so that Seller will retain a security interest in the equipment. If a Purchaser does
not make a payment on time, Seller can demand all overdue payments and repossess the
equipment. Seller can also recover its costs of collection, including court costs and attorney's
fees.
12. RESTRICTIONS OF SALES. No conditions are placed on Purchaser's ability
to offer goods or services or to the geographic areas in which goods or services will be
provided by Purchaser. Seller is not offering and Purchaser will not acquire any exclusive
location list or any exclusive rights to sell, distribute or market any of the vending machines
in a particular or specific geographic or marketing area. Seller has sold and Seller may
continue to sell the same or similar vending machines and mailing lists of possible locations
to other purchasers, which purchasers may have located or will locate his/her vending
machines in the same geographic areas as Purchaser intends to locate his/her vending
machines. The number of location lists, if any, to be furnished for any specific geographic
area will be determined solely by Seller. Seller has its prospective Purchasers undergo an
interview and evaluation process, which is primarily a self-elimination process, the purpose
of which is to encourage a prospective Purchaser to consider whether he/she is suitable for
the business. During the process, the prospective Purchaser is requested to consider issues
such as his/her ability to accept responsibility, to follow procedures and to self promote
his/her business and to recognize the hard work and commitment required to make the
business successful. If, during this process, a prospective Purchaser is discouraged or if
his/her commitment is weakened, then he/she should not become a Purchaser. Seller's
objective in this interview and evaluation process is to encourage the prospective Purchaser
to fully consider his/her personal goals and commitment to this business prior to entering into
the Purchase Contract. Additionally, this process is intended to give Purchasers a greater
sense of pride in their business, and result in them being less likely to be disappointed or to
disappoint Seller as their business is developed.
13. PERSONAL PARTICIPATION REQUIRED OF THE PURCHASER IN THE
OPERATION OF THE SELLER-ASSISTED MARKETING PLAN. Although Seller
recommends that each Purchaser personally participate in the direct operation of the business
being established pursuant to the seller-assisted marketing plan, Purchaser is not required to
participate personally in the direct operation of the business.
14.TERMINATION. CANCELLATION, AND RENEWAL OF THE
SELLER-ASSISTED MARKETING PLAN. Except for the manufacturer's warranties with
respect to the equipment purchased by Purchaser and the right of Purchaser to purchase
additional machines pursuant to the terms of the Purchase Contract, the Purchase Contract
shall terminate one year from the date entered into by Purchaser and Seller. The rights of a
Purchaser to cancel the Purchase Contract are described in the attached Purchase Contract.
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California Disclosure RD 2/16/10, PD 3/10
Except as may be required by applicable law, the Purchase Contract may not be renewed or
extended by any party. Except as set forth below, no restrictions are placed on Purchaser's
ability to transfer an interest in the seller-assisted marketing plan. The manufacturer's
warranties with respect to the equipment purchased by Purchaser are not transferable or
assignable.
15. SITE SELECTION. Seller does not represent or warrant that it will obtain
locations or outlets for Purchaser.
16. LINES OF EQUIPMENT. Seller may from time to time market the sellerassisted marketing plan offered herein with the same, similar or different lines of equipment,
such as, snack vending machines, refreshment vending machines, combination snack and
refreshment vending machines, coffee refreshment vending machines, and/or vending
machines with different operating systems or dispensing mechanisms. Buyers of these
different lines of vending machines may be in competition with the line of equipment offered
herein, and buyers have located or will locate his/her vending machines in the same
geographic area as Purchaser intends to locate his/her vending machines.
17. TRAINING PROGRAMS. Seller does not conduct an initial training
program, but does provide Purchaser with the information described in paragraph 5 above.
Such information is provided to Purchaser without additional charge.
18. PUBLIC FIGURE INVOLVEMENT IN THE SELLER-ASSISTED
MARKETING PLANS. No public figure is used in connection with the management or
operation of Seller or with a recommendation to purchase a seller-assisted marketing plan.
19.
of Seller.
FINANCIAL STATEMENTS. Attached hereto are recent financial statements
20. NO REPRESENTATIONS REGARDING RANGE OF SALES OR
EARNINGS. Seller makes no statement concerning the sales or earnings or range of sales or
earnings that may be achieved by Purchaser through this seller-assisted marketing plan.
21. PURCHASE CONTRACT. Attached hereto is a copy of the Purchase
Contract to be entered into between Purchaser and Seller.
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California Disclosure RD 2/16/10, PD 3/10
H] Winningham
fSl
Becker
jl & Company, LLP
INDEPENDENT AUDITORS' REPORT
21031 Ventura Blvd.
Suite 1000
Woodland Hills, CA
91364-222?
To the Board of Directors
Planet Antares, Inc.
Culver City, California
Tel (818) 598-6525
Fax (818) 598-6535
www.wbac.com
We have audited the accompanying balance sheets of Planet Antares, Inc. (a
California S corporation) as of December 31, 2009 and 2008. These financial
statements are the responsibility of the Company's management.
Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Planet Antares, Inc. as of
December 31, 2009 and 2008, in conformity with accounting principles generally
accepted in the United States of America.
IViarui IU, ^uiu
PLANET ANTARES, INC.
BALANCE SHEETS
AS OF DECEMBER 31, 2009 AND 2008
»
ASSETS
2008
2009
Current assets
Cash and cash equivalents
Certificates of deposit - restricted
Accounts receivable (net of allowance for
doubtful accounts of $5,000 in 2009 and
2008)
Loan and interest receivable - affiliate
Inventory
Employee advances and other receivables
Prepaid expenses
$
Total current assets
Property and equipment
Equipment
Computers
Furniture and fixtures
Vehicles
Leasehold improvements
$
Property and equipment, net
Other assets
Intangibles, net of accumulated amortization of
$119,910 in 2009 and $78,798 in 2008
Security deposits
Deferred income taxes
Total other assets
$
1,218,498
229,001
165,241
92,171
631,222
15,023
64,248
1,138,832
215,351
93,467
702,156
3,169,428
2,623,714
403,515
207,101
33,314
320,549
402,710
403,515
207,101
33,314
462,711
385,274
—
1,367,189
(1,303,189)
Total property and equipment
Less accumulated depreciation and amortization
Total assets
992,581
235,351
1,491,915
(1,313,192)
64,000
178,723
496,770
48,626
10,774
537,882
48,626
14,069
556,170
600,577
3,789,598
$
3,403,014
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Accounts payable
Income taxes payable
Accrued liabilities
933,581
15,100
1,185,997
728,647
16,671
969,457
2,134,678
1,714,775
Unearned revenue
490,681
530,108
Shareholder's equity
Common stock, no par value, 10,000 shares
authorized, 1,000 shares issued and outstanding
Additional paid-in capital
Retained earnings
752,300
410,939
1,000
1,000
752,300
404,831
1,164,239
1,158,131
Total current liabilities
Total shareholder's equity
Total liabilities and shareholder's equity
$
3,789,598
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
$
3,403,014
PLANET ANTARES, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2009 AND 2008
NOTE 1: DESCRIPTION OF THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Planet Antares, Inc. (the Company) was incorporated in April 1987. The Company's principal business activity is the
development of comprehensive seller assisted marketing plans and vending equipment sales to refreshment vending
machine operators throughout the United States, Canada and Puerto Rico.
The Company's sole shareholder is also the sole shareholder of Purco Corporation (Purco). As described in Note 3, Purco
is the purchasing agent for the Company.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires the use of management's estimates. Due to their prospective nature, actual results could differ from these
estimates.
Cash and cash equivalents
The Company considers all highly liquid investments purchased with initial maturities of three months or less to be cash
equivalents. The Company places its temporary cash investments with a high quality financial institution located in
Southern California.
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash
deposits. Accounts are guaranteed by the FDIC up to $250,000. At times such investments may be in excess of the Federal
Deposit insurance Corporation (FDIC) insurance limit. The Company has not experienced any losses in such accounts.
The Company periodically reviews the financial condition of financial institutions in which it maintains cash balances.
Certificates of deposit - restricted
The Company maintains certificates of deposit in various states that require a deposit as a condition for the Company to
conduct business in that state. These certificates of deposit are all under the FDIC insured limits and mature at various
times throughout 2010. Certificates of deposit - restricted are not considered part of cash and cash equivalents.
Inventory
Inventory consists entirely of vending equipment held for sale and is stated at the lower of cost or market, using the
average cost method.
Property and equipment
Property and equipment is recorded at cost. The Company reviews the recoverability of long-lived assets whenever events
or changes in circumstances indicate that the carrying value of an asset may not be recoverable. This assessment is
performed based on the estimated future cash flows discounted and with interest charges. If the estimated cash flows were
less than the carrying value, a write down would be recorded to reduce the related asset to its estimated fair value. As of
December 31, 2009 and 2008, management believes that there are no impairment losses, and none have been recorded.
Intangible assets
The intangible assets include costs to change the name of the Company from Antares Corporation to Planet Antares, Inc.
PLANET ANTARES, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2009 AND 2008
NOTE 1: (CONTINUED)
Unearned revenue
The Company requires a deposit at the time a contract is signed. The deposits are recorded as unearned revenue until the
shipment of the vending equipment and marketing plan are provided to the customer or the customer defaults on their
contractual obligations. Unearned revenue is classified as a non-current liability as it makes no demands on working
capital.
NOTE 2: COMMITMENTS
The Company leases its office facility in Culver City, California under a non-cancelable operating lease, expiring
December 31, 2011.
Total minimum future rental payments under non-cancelable operating leases as of December 31, 2009 are summarized as
follows:
Year ended
December 31
Amount
2010
2011
Total minimum future rental payments
533,952
549.960
$ 1.083.912
Total minimum future rental payments have not been reduced by $835,932 of sublease rentals to be received in the future
under noncancelable subleases.
NOTE 3: RELATED PARTY TRANSACTIONS
During 2009 and 2008, the Company had the following related party transactions:
With Purco Corporation:
Purchasing agreement
The Company has an arrangement with Purco under which Purco arranges for the purchase of vending equipment by the
Company's customers. As of December 31, 2009 and 2008, the Company owed Purco commissions of $37,404 and
$18,753 respectively.
Receivable
Purco owed $1,995 to the Company as of December 31, 2008.
With Planet Antares - UK (the Affiliate)
During 2009, the Company provided a $1,000,000 credit line to Planet Antares - UK. The Affiliate operates in the United
Kingdom and is wholly owned by the Company's shareholder. During the year, $754,770 was loaned to the Affiliate. As
of December 31, 2009, the Affiliate owed $631,222 to the Company, including $6,225 of accrued interest. The Company
is accruing interest monthly with an interest rate of one and one-half percent above the federal prime lending rate (3.25% as
of December 31, 2009).
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2009 AND 2008
NOTE 1: DESCRIPTION OF THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Planet Antares, Inc. (the Company) was incorporated in April 1987. The Company's principal business activity is the
development of comprehensive seller assisted marketing plans and vending equipment sales to refreshment vending
machine operators throughout the United States, Canada and Puerto Rico.
The Company's sole shareholder is also the sole shareholder of Purco Corporation (Purco). As described in Note 3, Purco
is the purchasing agent for the Company.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires the use of management's estimates. Due to their prospective nature, actual results could differ from these
estimates.
Cash and cash equivalents
The Company considers all highly liquid investments purchased with initial maturities of three months or less to be cash
equivalents. The Company places its temporary cash investments with a high quality financial institution located in
Southern California.
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash
deposits. Accounts are guaranteed by the FDIC up to $250,000. At times such investments may be in excess of the Federal
Deposit insurance Corporation (FDIC) insurance limit. The Company has not experienced any losses in such accounts.
The Company periodically reviews the financial condition of financial institutions in which it maintains cash balances.
Certificates of deposit - restricted
*\
The Company maintains certificates of deposit in various states that require a deposit as a condition for the Company to
conduct business in that state. These certificates of deposit are all under the FDIC insured limits and mature at various
times throughout 2010. Certificates of deposit - restricted are not considered part of cash and cash equivalents.
Inventory
Inventory consists entirely of vending equipment held for sale and is stated at the lower of cost or market, using the
average cost method.
Property and equipment
Property and equipment is recorded at cost. The Company reviews the recoverability of long-lived assets whenever events
or changes in circumstances indicate that the carrying value of an asset may not be recoverable. This assessment is
performed based on the estimated future cash flows discounted and with interest charges. If the estimated cash flows were
less than the carrying value, a write down would be recorded to reduce the related asset to its estimated fair value. As of
December 31, 2009 and 2008, management believes that there are no impairment losses, and none have been recorded.
Intangible assets
The intangible assets include costs to change the name of the Company from Antares Corporation to Planet Antares, Inc.
PLANET ANTARES, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2009 AND 2008
NOTE 4: POST-EMPLOYMENT BENEFITS
Certain Company key employees are entitled to severance pay if they are terminated without cause. Management has
determined that it is impracticable to estimate the amount of compensation for severance pay and accordingly, no liability
has been recorded in the accompanying financial statements.
NOTE 5: MANUFACTURER'S AGREEMENT
The Company uses independent manufacturers to produce vending equipment and various dollar change machines. The
manufacturers build and store the machines, and ship the machines directly to the Company's customers at the Company's
direction or that of Purco. Each machine is covered by the manufacturers' warranties. Management believes the Company
is not dependent on any of the manufacturers to produce these machines and could continue business with another
manufacturer, if necessary.
Beginning in 2008, the Company began selling a new line of vending equipment manufactured by different suppliers.
Therefore, the Company terminated its agreement with its previous manufacturers. The Company purchased equipment
and parts from the prior independent manufacturers in order to ensure adequate support and service to existing customers.
Management believes the inventory purchased will adequately provide for the needs of existing customers. Management
does not believe there will be any effect on the Company's continuing operations as they have contracted with other
independent manufacturers to produce their new line of vending equipment.
NOTE 6: RECLASSIFICATIONS
Certain reclassifications have been made to the prior year's financial statements to conform to the current year presentation.
These reclassifications had no effect on previously reported retained earnings.
NOTE 7: SUBSEQUENT EVENTS
Subsequent events were evaluated to determine if events that occurred should be reported or disclosed in the financial
statements as of December 31, 2009. Events were evaluated through March 10, 2010, the date the financial statements
were issued.
ACKNOWLEDGMENT
The undersigned hereby acknowledges that they (i) are receiving a complete copy of
the Purchase Contract and the California Disclosure Statement and Information Sheet and (ii)
had previously received a complete copy of the same documents at the presentation
attended
.
(Must be at least 2 days prior to contract signing)
SELLER
DATE
PURCHASER
DATE
PURCHASER
DATE
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